The scandal-plagued Libor interbank rate formally broke with its past yesterday as NYSE Euronext, the transatlantic exchanges operator, won the right to take over and reform the global benchmark, which serves as the reference point for more than $350tn in contracts worldwide.
The new administrators will be charged with restoring confidence in the interbank lending rate amid a global probe that has seen three banks pay nearly $2.6bn in fines for rigging the rate in order to make money on derivatives. The scandal has drawn nearly a dozen other banks and interdealer brokers and has tarnished the reputation of the City of London.
An independent committee, set up by the UK government, selected the New York-based group over two UK-based rivals. NYSE Euronext will take over the London Interbank Offered Rate from the British Bankers’ Association by early 2014. “This change will play a vital role in restoring the international credibility of Libor,” said Baroness Hogg, a leading City and British establishment figure, who chaired the committee.